Loan grading involves analyzing key borrower and loan characteristics, including credit scores, income stability, payment behavior, industry conditions, and collateral value. Lenders assign grades ranging from low-risk to high-risk categories, helping determine monitoring requirements and pricing strategies. Regular reviews ensure that grades reflect current borrower circumstances. This structured approach enables financial institutions to identify potential issues early and make data-driven lending decisions. Read Full Blog - https://www.mymudra.com/blog/what-is-loan-grading